The WACC of BIDV Securities JSC (BSI.VN) is 12.6%.
| Range | Selected | |
| Cost of equity | 14.10% - 17.90% | 16.00% |
| Tax rate | 19.90% - 20.40% | 20.15% |
| Cost of debt | 4.00% - 9.70% | 6.85% |
| WACC | 10.6% - 14.7% | 12.6% |
| Category | Low | High |
| Long-term bond rate | 2.7% | 3.2% |
| Equity market risk premium | 9.5% | 10.5% |
| Adjusted beta | 1.2 | 1.35 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 14.10% | 17.90% |
| Tax rate | 19.90% | 20.40% |
| Debt/Equity ratio | 0.47 | 0.47 |
| Cost of debt | 4.00% | 9.70% |
| After-tax WACC | 10.6% | 14.7% |
| Selected WACC | 12.6% | |
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for BSI.VN:
cost_of_equity (16.00%) = risk_free_rate (2.95%) + equity_risk_premium (10.00%) * adjusted_beta (1.2) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.